Optus is in hot water with the Australian Competition and Consumer Commission (ACCC) after the telco’s wholly owned subsidiary was accused of misleading behaviour relating to the sale of prepaid phone cards.
The competitions watchdog has taken Federal Court action against Optus subsidiary, Prepaid Services, as well as Boost Tel. The latter does not have its own telco carrier, but buys services through Prepaid Services.
ACCC alleges the two companies promised certain phone cards would provide buyers a specified amount of calls which was not honoured. There were also issues regarding fees that were not meant to be applied as well as call rate charges.
According to a statement issued by the regulator, Prepaid Services and Boost Tel both engaged in misleading and deceptive conduct and made certain false or misleading representations in breech of the Trade Practices Act 1974.
The ACCC is demanding injunction relief, corrective advertising, community service orders and its cost of the proceedings.
The case has been fast tracked and a conference is scheduled in Perth’s Federal Court on September 14.
Optus is a subsidiary of SingTel (ASX: SGT). The company was unavailable to provide a comment at the time of publication.